Drivers unaware of new tax rules

A new survey has found that just six per cent of respondents said they were fully aware of the road tax changes that come into effect on 1 April.

Carried out by Carbuyer, the survey of more than 4,000 people also found that eight per cent knew changes were coming but didn’t know what they were, while a massive 86% were totally in the dark about them.

Under the current scheme, scores of different cars are exempt from road tax, or Vehicle Excise Duty (VED), because they emit less than 100 grams per kilometre (g/km) of carbon dioxide (CO₂).

For cars registered after April, though, only those that produce no CO₂ – fully electric and hydrogen cars – will be spared road tax. All other models registered from then will be liable for an annual road-tax bill of £140, regardless of CO₂ emissions. While the first year of road tax will still be based on CO₂ emissions and range from £10 to £2,000, this fee is almost always absorbed in a car’s on-the-road price – meaning it isn’t usually seen as a running cost by consumers.

However, cars with a list price of more than £40,000 will also incur an additional £310 levy for the first five years of ownership, bringing their total annual VED bill to £450 during that time.

Carbuyer editor Stuart Milne said, ‘While the changes should provide more reasons for cost-conscious buyers to choose a fully electric vehicle, they remove much of the incentive for buyers to choose low-emission models with a petrol or diesel engine. Remarkably, a 1.0-litre Vauxhall Corsa will attract the same tax bill as a 5.0-litre Ford Mustang once the first year of tax has been paid.

‘Buyers should also be aware that the list price includes the cost of any options. Choose too many extras and you could unwittingly push your car’s price above £40,000 – that’ll cost you an additional £1,550 over five years.’

Read our previous story about these road tax changes here.